Virginia developers take on Philly unions (with the aid of YouTube)
January 15, 2013 3:43 PM   Subscribe

Philadelphia has long been a city where trade unions hold a not-insignificant amount of power in real estate development. (A history of union influence in the city could be another post entirely.) But to what lengths are they willing to go to retain it? Steve Volk of Philadelphia Magazine profiles a construction job by young Virginia developers Matt and Michael Pestronk in which they took on the Philly trade unions (with some help from YouTube)... and the unions backed down.
For the Pestronks, the Goldtex equation begins and ends with economics. They sought bids for the job. When the results came in, they calculated that going all-union would run them an extra 40 to 50 percent in labor costs. Some unions, like the electricians, offered a competitive combination of cost and delivery time, or negotiated. Others didn’t. The Pestronks wound up awarding 40 percent of the job to unionized contractors. They didn’t concern themselves with how Trades would react to winning less than half the work, figuring any protest would be small. “To be honest,” admits Michael, “we were probably a little naive.”
After the Pestronks awarded bids to a mix of union and non-union contractors, all union contractors pulled out of the job. Union pressure on the construction site and non-union crews was unceasing. The Pestronks set up, dedicated to enshrining the unions' bad behavior -- most notably, vandalism and violence -- for all to see.

In the end, the unions and the Pestronks reached an uneasy detente.
The Trades swear to end their protest and begin whatever work is still available on the Goldtex building, as part of a mixed site of union and non-union workers. This is a radical about-face. In return, they asked the Pestronk brothers to make one of their next major jobs all-union.

That next job, the Atlantic Building, a 21-story high-rise on South Broad Street just two blocks from City Hall, is undoubtedly a prize. The Pestronks plan to rehab the whole building, installing retail to go with 300,000 square feet of apartments. A successful project there, without union labor, would send the signal that Trades dominance of the marketplace is clearly over. But the Pestronks refuse to commit one way or the other, insisting they’ll bid the project out, just like Goldtex.
Does the Goldtex project signal a sea change in how development is done in the city, or is it a fluke? My guess: Anyone subscribing to the Pestronks' YouTube channel will have plenty of new viewing material when construction begins on the Atlantic Building.
posted by supercres (1 comment total)

This post was deleted for the following reason: poster's request, do-over -- cortex

[Heya, if it's personal opinions you know shouldn't go in the post, it's not really okay to dump them right into the first comment like that. Let the discussion be what it's going to be if this isn's something for your personal blog.]
posted by cortex (staff) at 3:56 PM on January 15, 2013

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